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WASHINGTON, May 11, 2011 /PRNewswire-USNewswire/ —Rep. Nydia M. Velazquez (D-NY), the Ranking Member of the House Committee on Small Business, delivered the following statement today during a Committee markup of H.R. 1425, legislation to reauthorize the Small Business Innovation Research program:

“I think all of us agree that the SBIR program is important to America’s continued economic leadership in the world. Every year, SBIR funds thousands of projects and helps over 1,500 new companies get off the ground. Those startups develop innovative new products, make advances in technology and, most importantly, create new jobs.

“We’ve repeatedly tried to reauthorize the SBIR initiative for the long term, but the Senate has failed to act. I strongly support seeing this program updated, but we need to do so the right way — in a manner that benefits small businesses.

“Unfortunately, I am concerned that the process used to develop the current bill has not resulted in the best legislative product possible. There was never a full Committee hearing on this bill, which could have yielded important insights on how to improve the legislation. We have also sidestepped a Subcommittee mark-up of the legislation, another opportunity to refine and strengthen the legislation. I find it regrettable that in our first legislative venture, the Committee has abandoned regular order.

“Bad process generally results in poor legislation and that is reflected in the measure before us. As we work to reauthorize SBIR, small businesses need to be our first and foremost concern. However, in several instances, this bill put the interests of bureaucrats ahead of entrepreneurs, by allowing federal agencies to take SBIR grant money to cover administrative costs. Enabling agencies to siphon off as much as 13 percent of SBIR grant money would deprive small firms of more than $250 million in research funding, every year.

“Those dollars should not be used as a slush fund for federal bureaucrats. They should be fueling medical breakthroughs, promoting the development of new energy sources, sparking the innovation of new products — and supporting the creation of small business jobs. I am not only concerned about how these provisions would impact SBIR, but the precedent they would set. Are we going to start drawing funds away from other small business programs in order to pay for their administration? Don’t we want the funds Congress authorizes for small business assistance to actually go to the small businesses?

“In promoting the bill, I have heard it repeatedly said that there is “no cost” associated with this bill. Only in Washington would you take a quarter billion dollars out of the hands of small businesses and claim there is ‘no cost.’ Just as this legislation would reduce funding available for small businesses, it would also create regulatory hurdles and paperwork burdens for entrepreneurs wishing to participate in SBIR. If we want the SBIR and STTR programs to be successful, we should be encouraging participation, not making it harder for firms to get involved.

“The bill also continues discriminating between businesses based on their financing model. This is a practice by SBA that shuts out of the program some of the most promising companies. I was under the impression that this was to be the ‘free market Congress.’ It is therefore confusing and disappointing that we are considering legislation which allows such ‘anti-market’ practices to continue.

“Mr. Chairman, the SBIR and STTR programs are important tools in helping rebuild our economy for the long term. After all, when entrepreneurs develop new products or make scientific advancements, they not only create jobs here in the United States, but they also help position our nation in the global economy for the long term.

“Unfortunately, the bill before us will weaken these programs and mean less opportunity for America’s entrepreneurs. It is my hope that during today’s markup, we can correct some of the deficiencies in this legislation before it is considered by the full House.”

SOURCE Representative Nydia M. Velazquez, Ranking Member, House Committee on Small Business